Cash dividends and investor protection in Asia

Goyal, Abhinav; Muckley, Cal B.

doi:10.1016/j.irfa.2013.03.009

Cited by 40 publications

(25 citation statements)

References 35 publications

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“…We observe that most South Korean firms pay cash dividends (93% of firm-year observations have positive dividends) and have contractual debt obligations (98%), but a smaller number of firms also use share repurchase to distribute profit to shareholders (43%). The proportion of Korean firms paying dividends is in line with the extant literature (Goyal and Muckley, 2013). Furthermore, firms are more 10 Our sample size for South Korea is comparable with many existing studies for the same sample period, e.g.…”

Section: Sample Description and Preliminary Statisticssupporting

confidence: 77%

Role of Corporate Governance and Lifecycle in Determining Payout Precommitment in an Emerging Economy

2020

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We analyze the role of firm-level corporate governance in determining the precommitment payout policy of emerging market firms and investigate if there is a precommitment lifecycle effect. Unlike previous studies for the U.S. firms, we only find evidence of precommitment among relatively wellgoverned firms, who combine good governance with large dividend payouts to shareholders and large debt-related repayments to creditors. We also document a strong precommitment lifecycle effect. Firms in the growth and mature stages of their lifecycle tend to use both debt and dividends to precommit to investors, with an increasing proportion of dividends in total payout measures. Our results are robust to an array of control variables, alternate payout proxies, firm-level corporate governance and addresses any potential endogeneity concerns in the sample.

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Section: Sample Description and Preliminary Statisticssupporting

confidence: 77%

Role of Corporate Governance and Lifecycle in Determining Payout Precommitment in an Emerging Economy

2020

Self Cite

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“…The Center for Research in Security Prices (CRSP) reports firm dividend information, such as dividend announcement dates, dividend payments, and payment frequency. Financial firms are removed from the analysis because their dividends are possibly a by‐product of their regulations (Fama and French, ; Goyal and Muckley, ; Mathur et al ., ; Chen and Kao, ). This study examines unexpected quarterly dividend changes, thereby removing dividends paid at all other frequencies .…”

Section: Datamentioning

confidence: 99%

When are dividend increases bad for corporate bonds?

Wei

Truong

2019

Accounting & Finance

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Employing an event study approach, we examine 5,574 bond return reactions to unexpected quarterly dividend change announcements in the U.S. corporate bond market over the period 2002-2014. On average, bond price reaction is in the same direction as dividend changes, which supports the hypothesis that dividend changes signal future firm performance. However, the price reaction varies significantly in the spectrum of bond's risk. Importantly, we document that some bondholders react negatively to unexpected dividend increases, indicating a wealth transfer effect. Such wealth transfer effect is most likely to occur in very high risk bond approaching maturity issued by firms with a low level of cash and incorporated outside Delaware.

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“…Meanwhile, there is less empirical evidence available from developing countries, taking into consideration that there might be significantly different practices and phenomena between the two. Besides the different practices of corporate governance and the macroeconomic environment, different legal constraints also make dividend policies vary widely among countries (La Porta et al 2000;Goyal and Muckley 2013).…”

Section: Introductionmentioning

confidence: 99%

“…Meanwhile, there is less empirical evidence available from developing countries, taking into consideration that there might be a significant difference in the practices of corporate governance and the dividend policy decision (Mitton 2004). Beside the different practices of corporate governance, the different legal constraints also make dividend policies vary widely among countries (La Porta et al 2000;and Goyal and Muckley 2013). Therefore, this study uniquely investigates the propensity to pay dividends and its determinant on listed firms in Indonesia to seek an empirical explanation why many firms on the IDX have not paid dividends, and to assess if we need to apply a mandatory dividend regulation, and if the authority wants to apply the rule, what aspects must be considered in the regulation.…”

Section: Introductionmentioning

confidence: 99%

Do We Need a Regulation on Dividends for Indonesia Stock Exchange?

Wardhana

Tandelilin

2018

GADJAH MADA INT. J. BUS.

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This study examines the dividend life-cycle hypothesis and the propensity of non-financial firms listed on the Indonesia Stock Exchange (IDX) to pay dividends, in light of a recent idea by the IDX to regulate dividend payments. Using several proxies of the life cycle, the results consistently show that Indonesian listed firms follow the dividend life-cycle hypothesis. Our results recommend that if the authority insists on regulating dividend payments, the regulation should take into account the firms' life cycles. Firms should only be required to pay dividends when they reach a certain stage and/or meet defined characteristics, according to their stage or characteristics.

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Cash dividends and investor protection in Asia

Cited by 40 publications

References 35 publications

Role of Corporate Governance and Lifecycle in Determining Payout Precommitment in an Emerging Economy

Role of Corporate Governance and Lifecycle in Determining Payout Precommitment in an Emerging Economy

When are dividend increases bad for corporate bonds?

Do We Need a Regulation on Dividends for Indonesia Stock Exchange?

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